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#1 09-04-2024 21:07:55

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: What's new with the pair?

EUR/USD: What's new with the pair?


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Will Ms. Christine Lagarde begin her process of lowering rates in June before the Fed? This would constitute a first in the history (short it is true) of the European Central Bank. In any case, this is the challenge of the next Council of Governors which ends this Thursday. Because if a status quo on the rates itself is acquired, barring any last minute surprises, the language elements and the press conference will be scrutinized to see to what extent the powerful monetary institution in Frankfurt is sufficiently satisfied with the price trajectory.

"Inflation seems less and less to be a problem in the euro zone," notes Thomas Giudici, head of bond management at Auris Gestion. "The March publication thus reports a further fall, below expectations, in overall and underlying inflation. Inflation in services, which remains around 4%, may allow the ECB to delay a little longer (this will surely be highlighted during this week's monetary policy meeting). But for how long ? Christine Lagarde will soon no longer have the luxury of letting Jerome Powell lead the way."

The odds of a federal rate cut in June have now fallen to 1/2 according to the CMEGroup's FedWatch tool.

In terms of statistics, currency traders took note on Monday of the Sentix investor confidence index in the Euro Zone, which rose to -6 this month, well above expectations.

Nothing to get your teeth into regarding American macroeconomic statistics on Monday. We will have to wait until Wednesday to see the agenda really thicken with the famous CPI (consumer price index). They are expected to increase by 3.3% year-on-year, for the broadest basket of products.

The Euro benefited somewhat this morning from a significant reduction in the monthly deficit in the French trade balance. RAS on the other hand concerning the NFIB index of American small businesses, which came out in line with expectations.

Right now, the EUR/USD is trading at $1.0858.

KEY CHART ELEMENTS
While the currency pair regains support on the lower limit of the Bollinger bands (20;2.5) and the 20-day moving average (in dark blue) still gravitates above its 50-day counterpart (in orange ), the opinion remains bullish. We will target the upper Bollinger band, currently in the immediate vicinity of $1.1 per ?. Beyond that, a succession of intermediate resistance presents itself, at 1.1012, 1.1069 and $1.1144.

MEDIUM TERM FORECAST
Considering the key graphical factors that we have mentioned, our opinion is positive in the medium term on the EUR/USD.

Our entry point is at 1.0868 USD. The price target for our bullish scenario is $1.1069. To preserve the invested capital, we advise you to position a protective stop at 1.0779 USD.

The expected profitability of this forex strategy is 201 pips and the risk of loss is 89 pips.

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